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“Critical technologies” finally found their way into German FDI rules but start-ups and financial investors may be less burdened than previously assumed.
The long-awaited 17th amendment of the Foreign Trade and Payments Ordinance (
Außenwirtschaftsverordnung -
AWV) has now come. It will enter into force on May 1, 2021.
After three amendments of the German FDI control regime in 2020, Germany now tightens its FDI control regime once again. The new changes further implement the Regulation (EU) 2019/452 of March 19, 2019 (EU FDI Screening Regulation), specially targeting “critical technologies” such as artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defense and many others. Mandatory FDI notification is now required for foreign investment in these tech-related targets. The new rules will definitely have a strong impact on future foreign investments and M&A activity in Germany. The good news is that Germany tries to balance (at least to certain extent) national security interests against an open and investor-friendly environment.